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Title:Will it Last? An Assessment of the 2001 German Pension Reform PDF Logo
Authors:Bonin, Holger
Issue Date:2001
Series/Report no.:IZA Discussion paper series 343
Abstract:In May 2001, Germany adopted a fundamental pension reform cutting back public pensions and introducing personal pension accounts. The paper critically reviews the reform decisions and evaluates their long-term viability. It is shown that the adjustment of the Public Pension Scheme misses the proclaimed contribution rate and replacement ratio targets already under moderate economic conditions. However, the new private pension plans provide scope for further downsizing state pensions, necessary beyond 2025. As the enacted savings rate target is conservative, individual pensions keep retirement income sufficient even if returns to pension funds are low due to legal restrictions on savings vehicles.
Subjects:Pension reform
pension funding
fiscal projections
Germany
JEL:F22
E66
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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